CarMax 2013 Annual Report Download - page 19

criminal investigations and proceedings. These actions could expose us to adverse publicity and to substantial
monetary damages and legal defense costs, injunctive relief and criminal and civil fines and penalties, including
suspension or revocation of licenses to conduct business.
Automotive Manufacturers. Adverse conditions affecting one or more automotive manufacturers could have a
material adverse effect on our results of operations. Manufacturer recalls could also adversely affect used vehicle
sales or valuations and could expose us to litigation and adverse publicity related to the sale of a recalled vehicle,
which could have a material adverse effect on our business, sales and results of operations.
Weather. The occurrence of severe weather events, such as rain, snow, wind, storms, hurricanes or other natural
disasters, could cause store closures, adversely affecting consumer traffic, and could have a material adverse effect
on our sales and results of operations in a given period.
Seasonal Fluctuations. Our business is subject to seasonal fluctuations. We generally realize a higher proportion
of revenue and operating profit during the first and second fiscal quarters. If conditions arise that impair vehicle
sales during the first or second fiscal quarters, these conditions could have a disproportionately large adverse effect
on our annual results of operations.
Geographic Concentration. Our performance is subject to local economic, competitive and other conditions
prevailing in geographic areas where we operate. Since a large portion of our sales is generated in the Southeastern
U.S., including Florida, and in Texas, Southern California and Washington, D.C./Baltimore, our results of
operations depend substantially on general economic conditions and consumer spending habits in these markets. In
the event that any of these geographic areas experienced a downturn in economic conditions, it could have a material
adverse effect on our business, sales and results of operations.
Accounting Policies and Matters. We have identified several accounting policies as being “critical” to the fair
presentation of our financial condition and results of operations because they involve major aspects of our business
and require management to make judgments about matters that are inherently uncertain. These policies are
described in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and
the notes to consolidated financial statements included in Item 8. Materially different amounts could be recorded
under different conditions or using different assumptions. In addition, the implementation of new accounting
requirements or other changes to U.S. generally accepted accounting principles could have a material adverse effect
on our reported results of operations and financial condition.
Other Material Events. The occurrence of acts of terrorism, the outbreak of war or other significant national or
international events could have a material adverse effect on our business, sales, results of operations or financial
condition.
Item 1B. Unresolved Staff Comments.
None.
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